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Maryland PSC Invites Proposals For Specific Prices For Green Power Rate Caps
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The Maryland PSC has invited stakeholders to file proposed specific green power prices (the actual rates, not just the rate calculation mechanisms) that shall serve as the PSC-set price cap for retail supplier green power offers starting January 1, 2025
Effective January 1, 2025, SB 1 generally imposes a rate cap on new and renewed residential service equal to the 12-month trailing average default service rate. SB 1 allows green power plans to exceed this general service rate cap, either under a green power rate cap set by the PSC available to suppliers on a generic basis, or through supplier-specific petitions for a supplier-specific green power rate
Previously, PSC Staff proposed that the PSC set the generic green power price cap as the most recent trailing 12-month average SOS rate plus the average Tier 2 REC
price in the previous year's RPS report.
The PSC already invited and received comments on Staff's proposal
Now, the PSC has invited parties to file a proposed maximum green power product price for each utility service area, along with the most recent 12-month average SOS rate.
Although not explicit, the PSC's invitation for specific green power prices may reflect that the PSC may consider adopting a "no regrets" green power price cap on an interim basis that can be approved prior to January 1, 2025, while the PSC undertakes a more comprehensive review of a formal mechanism to be in place for the long-term
Because SB1's general price cap, which is the 12-month trailing average SOS rate, takes effect on January 1, 2025, and SB1 acknowledges that green power offers will likely be more expensive than historic SOS rates, the absence of a special, higher green power price cap (as allowed under SB1) in place by January 1, 2025 would likely cause the cessation of green power offers until such time as a specific green power price cap is adopted
As the PSC considers adopting a long-term solution for the green power price cap, retail suppliers had previously proposed an interim green power price cap equal to 150% of the 12-month trailing average SOS rate. Suppliers noted that, under SB1, the PSC may not approve a green power rate higher than 150% of the 12-month trailing average SOS rate absent specific PSC findings that a higher rate is appropriator given renewable energy market dynamics. Thus, lawmakers have tacitly found that a green power price of 150% of the 12-month trailing average SOS rate is not harmful to customers on green power plans
It should be noted that because SB 1's generally applicable price cap relies on historic SOS rates, the lack of a specific green power price cap could even prohibit the offering of green power plans which are actually cheaper than the current SOS rate effective at the time of contracting, if the SOS rate has increased versus the 12-month trailing average
Case 9757
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November 21, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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